N.Y.-N.J. Port Authority bond rates fall
It’s still up there, but the interest rate that the Port Authority of New York and New Jersey is paying on some $100 million in short-term securities has come back out of the stratosphere.
At a weekly auction Tuesday, the interest on the auction rate securities were reset at 8 percent, down from the 20 percent rate the agency was socked with the prior week, according to the Bloomberg wire service. The prior week the rate had been just 4.3 percent.
Many municipalities and other issuers of short-term bonds saw similar increases in the past week.
Analysts said rates on the short-term bonds have soared not because investor confidence in the port authority, but because concerns over the financial health of insurance companies that guarantee municipal debt, some of which have exposure to subprime mortgage debt.